chightech — 2014-06-05T23:22:20-04:00 — #1
Hi everyone, of of my customer offered me an idea, currently he is doing well on amazon(more than $10,000 per month in sale, with not that many product), and wants to do his own website. He asked me if I'm interested taking over the whole website not just as a project, but as a long term partner, which means, I will do whatever I think will benefit the website in programming, design, and maintenance. He asked me if I want to do it with a fixed rate monthly or a profit share in revenue.
I have no experience in this kind work. Usually, I build the site, and if client ask for new task, I will just bill for the new work. Looks like he wants me treat the website as my own business, and invest as much as possible to bring more potential in this eCommerce business. I really dont know how much work will be involved in this case, very hard to estimate.
Have anyone had experience like this? any opinions?
Thank you so much!
mikl — 2014-06-08T12:47:01-04:00 — #2
When considering any kind of partnership deal, there's really only one criterion that matters: How well you relate with the other guy.
Do you feel that you can trust him to act with integrity and honesty? Can you communicate with him? Do you respect his technical and business abilities? Does he hold you in the same high esteem?
If you can answer Yes to this type of question, the venture has at least a chance of success. You will still need to evaluate his proposals carefully, and take professional advice where necessary. But the signs are good.
If not, be very cautious.
As for whether to go for a fixed-price or a profit share, that depends entirely on what level of risk you are willing to take. With a profit-share, you could end up with a much higher income. Equally, you could wind up with nothing. So you need to ask yourself how much you can afford to lose.
Hope this helps,
shadowbox — 2014-06-09T06:15:27-04:00 — #3
I'm usually weary when offered these kind of deals. If his business is doing so well, I would have thought he'd prefer to just hire you and take all profits for himself.
As Miki says, a lot of this depends on your existing relationship. Obviously if you trust him, feel the guy is capable of generating lots of money and reckon you're set to earn much more than being hired help, then maybe it's worth the gamble.
The devil is in the detail though - how much % are you going to get, how much work (and exactly what kind of work) are you expected to perform for this cut, how long is the deal for, is he going to expect specific results from your work and if so are his expectations realistic? Can your effectivelness all be easily measured? How much input are you going to have beyond web development? Are there shares being offered? How will you verify the profit each month - will you have access to the company books?
It could be a great opportunity, so make sure you go in with your eyes wide open and perhaps get some legal advice before signing any agreement (and yes, make sure there is an agreement that details everything - leave nothing to chance or assumption).
luckyisgood — 2014-07-18T14:31:22-04:00 — #4
I've had a number of potential clients, even the ones who just first contacted my company, ask us this question. We were offered shares in the future company, free advertising, partnerships, profit sharing - just to name a few of the ‘benefits’ we were offered.
’Opportunities’ like this one are a trap. The owner of the business cannot afford to hire a web developer or pay for custom software development. If he could, he would not ask a freelancer who builds his website to become his business partner. The other person only wants you for your hard work.
Other than that, you’re a professional. You already have a business. You’re either a freelancer or a small team or a web studio or a web agency. If you accept to work on your client’s business, your own will suffer. You’ll have to give one business up. Are you ready to give up your business right now and let a stranger have a say in your destiny?
Treat every business partnership like a marriage. Would you marry a person without dating her for a longer period of time? Would you welcome every person who earns a salary of $10,000 a month into your home and into your life?
Say ‘no, thank you, I already have a business’ and move on.
webservicescoach — 2014-07-27T20:10:41-04:00 — #5
Offer that you should get 90% of commission revenue. If you are in charge of everything and he just "runs the business" he should be the one to get just a small piece. Y'know, ya gotta figure, most standard affiliate programs payout 40, 50, sometimes 75%. You could probably find some of those products he's promoting on clickbank or some some other affiliate manager and get that 40-75% payout all to yourself and promote those products as you see fit. The percentage payment to you should be higher if you have to work under his watchful eye.
jaagare — 2014-08-06T00:48:40-04:00 — #6
There are a lot of risks associated with this kind of proposal. Unless you have a common account and control over the finances it might be difficult to prove you are a partner in business. Secondly what kind of income would be calculated under partnership? Would it be income from the website online store or even from the amazon store the customer is currently running? What if the same products are available at both stores. If someone decides to check the product on the site and purchase over amazon then? There is a lot of vacuum space and the kind of time and effort that would be required to run the site - you might need to think whether the income is sustainable and would take care of the expenses. If contracts are in place and if you trust and rely the partner then surely you can move ahead but take ample precautions before considering this.
technobear — 2014-08-06T03:38:00-04:00 — #7
Thanks to all who have taken the trouble to reply.
It's been two months now and the OP has never returned, so thread closed.